Montana tribe suspends indicted leaders

Chippewa Cree tribal leader John "Chance" Houle, left, walks out of U.S. District Court in Great Falls, Mont., after being arraigned on Tuesday, May 7, 2013. Houle and four others are accused of diverting federal stimulus funds. The Chippewa Cree Tribe received $33 million in federal funding between 2009 and 2010 for construction of a $361 million pipeline to supply fresh drinking water for the Rocky Boy's Indian Reservation and surrounding counties in northern Montana. Most of that $33 million came from the 2009 American Recover and Reinvestment act, also known as the stimulus. (AP Photo/Matt Volz)

HELENA, Mont. (AP) -- The Chippewa Cree tribe in northern Montana has suspended a tribal council member and a former state legislator who runs the tribe's construction company after the two were charged with stealing federal stimulus money.

Council member John Chance Houle and Chippewa Cree Construction Corp. CEO Tony Belcourt were arraigned Tuesday on 17 fraud, theft and money laundering counts. Four others, including Belcourt's wife, Hailey, also have been charged.

They are presumed innocent until proven guilty, but "we have moved to suspend without pay all parties involved in these incidents," the Chippewa Cree's tribal council said in a statement on its website.

The council said tribal leaders have held talks with federal officials and are taking steps to change their government and contracting procedures to prevent any future indiscretions.

"We ask for the support of the public, our tribal members and other government officials as we work through this difficult time in our Tribe's history," the statement said. "The Chippewa Cree Tribal government is taking all necessary actions to ensure total compliance with accepted accounting and procurement standards within all tribal departments and we, together with our federal partners, are investigating all claims of financial improprieties."

The Belcourts, Houle, Tammy Leischner, her husband, Mark Leischner, and Tammy Leichsner's father, James Eastlick Sr., are accused of using a shell company and intermediaries to divert hundreds of thousands of dollars in federal aid. The American Recovery and Reinvestment Act money was meant for a $361 million pipeline project being constructed to provide fresh drinking water to the Rocky Boy's reservation and surrounding counties.

All but Eastlick pleaded not guilty Tuesday. He is to be arraigned at a later date.

Tony Belcourt, a former state legislator, is the CEO and contracting officer of the tribal construction company heading the project. He awarded contracts and authorized cash transfers in a complex web of transactions to embezzle and launder the money, according to the federal indictment.

The Leichsners, who live in Laurel, are accused of setting up a sham consulting company that was used to obscure the movement of money.

The cash ended up in the bank accounts of that consulting company and in a tribal rodeo account controlled by Houle, federal prosecutors said.

More than $100,000 was used to start MT Waterworks, a Billings pipe supply company owned by Belcourt, while another $62,000 was used to buy a house in Box Elder in the name of Belcourt's wife, the indictment said.

It is unclear from the indictment what happened to the rest of the money.

Federal prosecutors are seeking the return of $311,000 and ownership of the house and MT Waterworks.